Commentary

FTC Increases Pressure On Instagram Influencers

The Federal Trade Commission is
stepping up its crackdown on social media influencers who fail to disclose that their Instagram posts are actually paid promotions.

Today, the FTC said it sent warning letters to 21 of the
same influencers who previously received reminders about their obligation to
disclose paid endorsements.

"As I said in my earlier letter, if you are endorsing a brand and have a 'material connection' with the marketer ... then your connection should be clearly and
conspicuously disclosed, unless the connection is already clear from the context of the endorsement," Mary Engle, associate director at the FTC's division of advertising practices, wrote. Engle added
that a material connection could include payment, free products or "other incentives."

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Engle told the warning letter recipients to inform the FTC by September 30 of their material connections
with endorsed brands. She also directed the influencers to outline how they plan to disclose their relationships with the brands.

The FTC didn't disclose the names of the influencers to
receive the warning letters. The move comes around five months after the agency sent "reminder letters" to dozens of Instagram influencers, informing them of their obligation to disclose connections between themselves and brands they
endorse. Celebrities receiving the initial round of letters included Victoria Beckham, Vanessa Hudgens and Jamie Lynn Spears.

In June, the watchdog groups Public Citizen, Commercial Alert,
Campaign for a Commercial-Free Childhood and the Center for Digital Democracy said the reminder letters were largely ignored.

The organizations looked at 46 recipients' Instagram posts over a
six-week period starting in May, and found that only one endorser "consistently used proper disclosures on what are likely paid posts."

While some of the other endorsers occasionally complied
with the FTC's letter, the vast majority of posts that appeared to be sponsored failed to include adequate disclosures, according to the advocates. In total, the groups examined 412 posts that
appeared to feature sponsored content. Of those, only 84 included acceptable disclosures, the groups said.

The warning letters weren't the FTC's only move today. The agency also announced a
settlement with two media influencers in the online gaming space -- Trevor “TmarTn” Martin and Thomas “Syndicate” Cassell.

They allegedly endorsed the online
gambling service CSGO Lotto, but failed to disclose that they owned the company. They also allegedly secretly paid other influencers to advertise CSGO Lotto on YouTube, Twitch, Twitter, and Facebook.
Martin and Cassell agreed to make "clear and conspicuous" disclosures in the future.